Being in the Business of Expanding Obamacare

By CultureBanx Team

  • A dozen insurers plan to enter new Obamacare markets in 2019
  • The health insurance market is a $990 billion industry

Insurers are still seeing dollar signs in President Obama’s landmark Affordable Care Act. As republicans look to dismantle the remaining pieces of the legislation, insurance startups are plunging into even more markets. Is there still money to be made in the business of Obamacare?

Why This Matters: The Affordable Care Act created a boom in Silicon Valley, while many healthcare startups have shut down there’s still growth in the sector. Since the law passed back in 2010, billions of investor dollars have flowed into digital health startups, helping to spur the $990 billion health insurance market. More than a dozen insurers plan to enter new Obamacare markets for 2019, according to the Kaiser Family Foundation. Companies like Bright and Oscar are still finding growth in Obamacare’s profitable markets.

For Bright, the company is launching in nine additional markets and Oscar will expand into six additional states. Bright relies on partnerships with major urban health systems and raised $160 million in 2017. Oscar is valued at $3.2 billion and also works through narrow networks but is technology-focused. The company posted its first-ever quarterly profit during Q1 of this year.

The current administration has taken several steps to destabilize Obamacare markets. This has caused Big national insurers such as Humana (HUM -0.45%) and Aetna (AET -0.23%) to shutter their exchange businesses for next year.

Situational Awareness: Republicans are still working on a potential replacement for the Affordable Care Act. In the meantime, they are finding additional ways to undercut Obamacare like cutbacks for “navigators,” resources who help people find and sign up for Obamacare. The Trump administration recently announced plans to slash the navigators budget to $10 million, from $36 million last year.

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